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When Good Managers Are Key: How Leadership Can Make or Break Employee Retention
21 Nov 2025
The Australian Institute of Management found that 1 in 3 employees leave due to their manager and the cost of replacing an employee can often be 50% - 60% of their salary! A poor manager can drain morale, foster disengagement, and create an environment where employees feel uncomfortable coming to work. So, how can businesses ensure they’re not just attracting top talent but that they’re building leaders with the capability to retain them.
While company culture and values certainly matter, it's the managers who have the day-to-day influence over employee experience. Employees who feel unsupported, undervalued, or disconnected from their leadership are far more likely to seek opportunities elsewhere.
Taking the time to understand your workforce, learn where there are challenges with leadership and having the courage to tackle them head on is vital to the health and success of your business. Investing in good management is an investment in all levels of employees.
To ensure strong leadership and improve employee retention, companies should focus on:
- Making the right hiring decisions – when bringing a new leadership hire into your business, its vital to take the time to really dig deep on whether they have the managerial qualities you’re looking for.
- Investing in leadership development – Managers must be equipped with the tools and skills to lead effectively. Leadership training focused on empathy, communication, and problem-solving will help managers foster a supportive environment.
- Supporting career development – identify your business’s high performer and help them grow into the exemplary leaders you’re looking for. This next generation of great managers will then invest in their own team’s career progression.
- Addressing issues early – Don’t let problems fester and don’t avoid dealing with poor performance in management, the trickle down effect to team members is not worth it.
Managers are the key to retaining your talent. When leadership is strong, employees feel supported, valued, and connected to the company’s mission. What steps are you taking to invest in your managers? Share your thoughts or strategies in the comments or reach out to Ignite for support in taking the next steps!
